U.S.Treasury Supply to Hit $31 Trillion by 2025, Impacting Crypto
Binance predicts the U.S.Treasury supply will reach $31 trillion by 2025.This forecast, from a Binance Research report, suggests significant implications for the economy and cryptocurrencies.
the report, released on April 18, indicates that Treasury issuance will account for 109% of GDP and 144% of the M2 money supply. This surge in bonds could create financing pressure, especially during auction refinancing.
Changes in M2 can affect stocks, bonds, and crypto. Analysts at Binance Research highlight that foreign demand is crucial. About a third of the expected supply will be owned by foreign investors.
If foreign appetite for U.S. debt decreases, financing costs could rise. Yields may also increase. Even if demand remains stable, the scale of issuance poses a structural challenge.
Recent market relief, linked to trade talks, doesn’t offset the pressure on interest rates. Stocks and crypto, including Bitcoin (BTC), have faced downward pressure. Tariffs and the Fed’s inaction on rate cuts have added to the jitters.
Analysts warn that persistent upward pressure from Treasury supply could impact risk assets. Though, if the government resorts to debt monetization, it might very well be bullish for risk assets. In such a scenario, investors might turn to Bitcoin and other hard assets to hedge against currency debasement.
